NAR Report: Market Could Stabilize as More Homes are Listed

NAR Report: Market Could Stabilize as More Homes are Listed
National Association of REALTORS® | September 20, 2018

Existing-home sales remained mostly flat in August, bringing relief to markets following four consecutive months of decreases. Sales gains in the Northeast and Midwest helped to offset downturns in the South and West last month, according to the National Association of REALTORS®’ existing-home sales report, released Thursday.

Existing-home sales—which are completed transaction for single-family homes, townhomes, condos, and co-ops—remained at a seasonally adjusted annual rate of 5.34 million in August, the same as July. Sales are 1.5 percent below a year ago, NAR reports.

“Strong gains in the Northeast and a moderate uptick in the Midwest helped to balance out any losses in the South and West, halting months of downward momentum,” says Lawrence Yun, NAR’s chief economist. “With inventory stabilizing and modestly rising, buyers appear ready to step back into the market.”

Here’s a closer look at some of the findings:

  • Home prices: The median existing-home price for all housing types was $264,800—up 4.6 percent from a year ago.
  • Inventory: Total housing inventory at the end of August was at 1.92 million existing homes for sale, up from 1.87 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace.
  • Days on the market: Properties stayed on the market an average of 29 days in August, down from 30 days a year ago. Fifty-two percent of homes sold in August were on the market for less than a month. “While inventory continues to show modest year over year gains, it is still far from a healthy level and new home construction is not keeping up to satisfy demand,” Yun says. “Homes continue to fly off the shelves with a majority of properties selling within a month, indicating that more inventory—especially moderately priced, entry-level homes—would propel sales.”
  • All-cash sales: All-cash sales comprised 20 percent of transactions in August, unchanged from a year ago. Investors tend to make up the biggest bulk of all-cash sales. They made up 13 percent of home sales in August, down from 15 percent a year ago.
  • Distressed sales: Foreclosures and short sales accounted for 3 percent of sales in August, the lowest reading since NAR began tracking such data in October 2008. Broken out, 2 percent of sales were foreclosures and 1 percent were short sales.

“We are probably seeing a reaction to the uncertainty around how sustainable recent price increase will be in the near future,” says Ruben Gonzalez, chief economist at Keller Williams. “Nationally, we expect sales to continue to track slightly below last year’s levels as inventory starts to move upward.”

Source: National Association of REALTORS®; REALTOR® Mag News, 092018

Lots Are Costing Buyers More

Lots Are Costing Buyers More
National Association of Home Builders | September 7, 2018

Lots may be getting smaller, but they’re also getting more expensive, according to analyzed data taken from the U.S. Census Bureau’s Survey of Construction. Single-family lot prices reached a new record high in 2017—half of the lots were priced at or above $47,400.

While this is a new nominal record, when adjusted for inflation, lot values have still not reached their peaks from the housing boom days, the National Association of Home Builders reports. During the housing boom, half of lots were priced at more than $43,000—this is more than $50,000 when converted to 2017 values.

However, some regions within the U.S. have seen their lot prices surpass their former peaks, even when adjusted for inflation. Rising lot values are the most pronounced in the West South Central and West North Central divisions, where lot values have climbed to new historical records.

The West South Central division—which includes Texas, Oklahoma, Arkansas, and Louisiana—tended to have values below the national median historically but started to catch up in 2015 to national numbers. Half of the lots in the region are selling for more than $56,000, which is a significant increase from the housing boom years when half of lots were priced under $30,000.

The West North Central division—which includes Iowa, Minnesota, and North and South Dakota—also saw lot prices reach a record high. Half of the lots in the region were priced above $64,000 in 2017, which also exceeded values from the housing boom days.

NAHB lot prices

“Given that the nation’s lots are getting smaller and home production is still significantly below the historically normal levels, it might seem surprising that lot values keep going up,” the NAHB notes on its blog, Eye On Housing. “However, the rising values are consistent with persistent record lot shortages. They are also consistent with significant and rising regulatory costs that ultimately increase development costs and boost lot values.”

Source: “Lot Values Climb Higher,” National Association of Home Builders’ Eye On Housing blog (Sept. 5, 2018); REALTOR® Magazine 090818

August Brings Home Sales Increase

August Brings Home Sales Increase
Greater Nashville REALTORS®, Press Release September 7, 2018

NASHVILLE, Tenn. (Sept. 7, 2018) – There were 3,961 closings reported for the month of August, according to figures provided by Greater Nashville REALTORS®. This represents a 2.0 percent increase from the 3,883 closings reported for August 2017.

Year-to-date closings total 27,205 a 0.2 percent decrease compared to the 27,248 closings reported through July 2017.

“The numbers in August show a healthy increase in closings compared to August 2017,” said Greater Nashville REALTORS® President Sher Powers. “We’re also seeing strong pending sales as we head into September, which bodes well for fall closings.”

There were 3,152 properties under contract at the end of the month, compared to the 3,939 properties under contract at this time last year. The average number of days on the market for a single-family home was 27 days.

The median residential price for a single-family home during August was $305,000 and for a condominium it was $224,900. This compares with last year’s median residential and condominium prices of $285,000 and $207,061.

Active inventory at the end of August was 12,150, which increased from 9,208 in 2017.

“As inventory shows moderate increases across Middle Tennessee, the market is calming and offering more home options for buyers, which has inspired new buyers to step into the market and more sellers to list their homes,” added Powers.

About Us: Greater Nashville REALTORS® is one of Middle Tennessee’s largest professional trade associations and serves as the primary voice for Nashville-area property owners. REALTOR® is a registered trademark that may be used only by real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict code of ethics.

The data collected for this release represents nine Middle Tennessee counties: Cheatham, Davidson, Dickson, Maury, Robertson, Rutherford, Sumner, Williamson and Wilson.

View the August 2018 Market Data Infographic

Source: Greater Nashville REALTORS®, Press Release 090718

Nationally: Existing-Home Sales Reach Slowest Pace in 2 Years

Existing-Home Sales Reach Slowest Pace in 2 Years
National Association of REALTORS® | August 22, 2018

Existing-home sales slowed for the fourth consecutive month in July, reaching their most sluggish pace in more than two years, the National Association of REALTORS® reports. The West was the only major U.S. region to see an increase in sales last month.

1808_NAR-July-EHSTotal existing-home sales, which include completed transactions for single-family homes, townhomes, condos, and co-ops, fell 0.7 percent month over month to a seasonally adjusted annual rate of 5.34 million in July. Sales are now 1.5 percent lower than a year ago.

Rising home prices may be prompting would-be home buyers to pull away, says NAR Chief Economist Lawrence Yun. “Led by a notable decrease in closings in the Northeast, existing-home sales trailed off again last month, sliding to their slowest pace since February 2016 at 5.21 million [units],” Yun says. “Too many would-be buyers are either being priced out or are deciding to postpone their search until more homes in their price range come onto the market.”

Yun notes that a steady climb in home prices over the past year—along with an uptick in mortgage rates this spring—is cooling sales. “This weakening in affordability has put the most pressure on would-be first-time buyers in recent months, who continue to represent only around a third of sales despite a very healthy economy and labor market,” he says. First-time buyers comprised 32 percent of sales in July, down from 33 percent a year ago.

Here’s a closer look at some key indicators from NAR’s July housing report:

  • Home prices: The median existing-home price for all housing types was $296,600, a 4.5 percent increase from a year ago.
  • Inventories: Total housing inventory fell 0.5 percent to 1.92 million existing homes available for sale, unchanged from a year ago. At the current sales pace, unsold inventory is at a 4.3-month supply.
  • Days on the market: Fifty-five percent of homes sold were on the market for less than a month. Properties typically stayed on the market for 27 days, down from 30 days a year ago. “Listings continue to go under contract in under a month, which highlights the feedback from REALTORS® that buyers are swiftly snatching up moderately-priced properties,” Yun says. “Existing supply is still not at a healthy level, and new-home construction is not keeping up to meet demand.”
  • All-cash sales: All-cash transactions compromised 20 percent of sales, up from 19 percent a year ago. Individual investors tend to account for the biggest bulk of cash sales. They purchased 13 percent of homes, unchanged from a year ago.
  • Distressed sales: Foreclosures and short sales accounted for 3 percent of sales, down from 5 percent a year ago. Broken out, 2 percent of sales were foreclosures, and 1 percent were short sales.

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Source: National Association of REALTORS®; REALTOR® Magazine Online 082218

Fast-Paced Luxury Sales Raise Entry-Level Price Point

Fast-Paced Luxury Sales Raise Entry-Level Price Point
realtor.com | August 10, 2018

House 1058It’s a good time to be selling high-end real estate: The luxury market is posting a record number of sales, and 19 major areas also saw double-digit gains in July, according to realtor.com®’s 2018 Luxury Home Index. The index measures the entry-level luxury price tier, which is the top 5 percent of residential sales among 91 U.S. counties.

In 49 of the 91 markets analyzed by realtor.com®, the luxury tier had an entry point of at least $1 million. The number of sales at or above $1 million climbed 12 percent over the last year, realtor.com® reports.

“The strong economy is bolstering demand for luxury homes,” says Danielle Hale, realtor.com®’s chief economist. “They are selling fast and demand for these homes has pushed the entry-level price point to more than $1 million in half of the markets studied. Although there are some pockets of weaker performance, we’ve seen double-digit price growth in 19 markets for the first time in four years.”

Luxury homes are selling faster, too. The median age of inventory in the 91 luxury markets tracked was 108 days in July, down 11 days or by 9.3 percent year over year, realtor.com® reports.

The fastest-growing luxury market in July: Sarasota, Fla., which continued to hold onto its top spot on realtor.com®’s list. Luxury sales prices in Sarasota have risen 21.2 percent since last May. Half of all luxury homes there have also sold within 157 days, which is 21 days faster than a year ago. Rounding out realtor.com®’s list of the top five fastest-growing luxury markets in July were Queens, N.Y.; Maui, Hawaii; Santa Clara, Calif.; and Boulder, Colo. Each of the cities posted a yearly growth of between 13 to 16 percent.

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Source: “Luxury Housing Sets New Records,” realtor.com® (Aug. 9, 2018); REALTOR® Magazine Online 081018

Middle Tennessee Housing Inventory Continues to Rise

Middle Tennessee Housing Inventory Continues to Rise
Greater Nashville REALTORS®, Press Release | August 7, 2018

TheGulchNashvilleNASHVILLE, Tenn. (Aug. 7, 2018) – There were 3,812 closings reported for the month of July, according to figures provided by Greater Nashville REALTORS®. This represents a 1.5 percent decrease from the 3,872 closings reported for July 2017.

Year-to-date closings total 23,242 a 0.5 percent decrease compared to the 23,365 closings reported through July 2017.

“The numbers in July show a slight decrease in closings compared to 2017, but the market remains stable as we continue to see a steady inventory increase,” said Greater Nashville REALTORS® President Sher Powers. “We are pleased to see inventory continue to grow across Middle Tennessee, which is not the case in other markets across the country.”

There were 3,347 properties under contract at the end of the month, compared to the 3,575 properties under contract at this time last year. The average number of days on the market for a single-family home was 25 days.

The median residential price for a single-family home during July was $307,000 and for a condominium it was $222,750. This compares with last year’s median residential and condominium prices of $288,243 and $203,000.

Active inventory at the end of July was 11,671 which increased from 9,151 in 2017.

“The continued increase in inventory can lead to a more balanced and healthy market across Middle Tennessee, calming the steady pricing increases we’ve seen in the past few years, which in turn may inspire buyers on the fence to start their home buying search,” said Powers.

### About Us: Greater Nashville REALTORS® is one of Middle Tennessee’s largest professional trade associations and serves as the primary voice for Nashville-area property owners. REALTOR® is a registered trademark that may be used only by real estate professionals who are members of the National Association of REALTORS® and subscribe to its strict code of ethics. ###

The data collected for this release represents nine Middle Tennessee counties: Cheatham, Davidson, Dickson, Maury, Robertson, Rutherford, Sumner, Williamson and Wilson.

View the July 2018 Market Data Infographic

Source: Greater Nashville REALTORS®, Press Release 080718

Nationally: Sky-High Home Prices Shatter Ceiling Again

Nationally: Sky-High Home Prices Shatter Ceiling Again
National Association of REALTORS® | July 23, 2018

Ongoing inventory shortages helped to push the median sale price for existing homes to another all-time high in June, the National Association of REALTORS® reports. The median price for all housing types was $276,900, surpassing a previous record set in May. Home prices have surged 5.2 percent since a year ago.

June2018NARsnapshotThe mix of low inventory and high home prices may have had influence on existing-home sales in June, which fell for the third consecutive month. Total existing-home sales, which include completed transactions for single-family homes, townhomes, condos, and co-ops, declined 0.6 percent to a seasonally adjusted annual rate of 5.38 million. Sales are now 2.2 percent lower than a year ago, with drops in the South and West offsetting gains in the Northeast and Midwest.

“There continues to be a mismatch since the spring between the growing level of homebuyer demand in most of the country in relation to the actual pace of home sales, which are declining,” says NAR Chief Economist Lawrence Yun. “The root cause is without a doubt the severe housing shortage that is not releasing its grip on the nation’s housing market. What is for sale in most areas is going under contract very fast and, in many cases, has multiple offers. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales.”

Here’s a closer look at key indicators from NAR’s June housing report:

  • Inventory: Total housing inventory rose 4.3 percent to 1.95 million existing homes available for sale, which is 0.5 percent higher than a year ago. That marks the first year-over-year increase since June 2015. Unsold inventory is at a 4.3-month supply at the current sales pace.
  • Days on the market: Fifty-eight percent of homes sold in June were on the market less than a month. Properties, on average, stayed on the market for 26 days, down from 28 days a year ago. “It’s important to note that despite the modest year-over-year rise in inventory, the current level is far from what’s needed to satisfy demand levels,” Yun says. “Furthermore, it remains to be seen if this modest increase will stick given the fact that the robust economy is bringing more interested buyers into the market and new-home construction is failing to keep up.”
  • First-time buyers: First-time buyers comprised 31 percent of sales, down from 32 percent a year ago.
  • All-cash sales: All-cash transactions made up 22 percent of transactions, up from 18 percent a year ago. Individual investors account for the biggest bulk of cash sales. Investors comprised 13 percent of home sales in June, unchanged from a year ago.
  • Distressed sales: Foreclosures and short sales made up 3 percent of sales, the lowest since NAR began tracking such data in October 2008. Distressed sales are down 4 percent from a year ago. Broken out, 2 percent of sales were foreclosures, and 1 percent were short sales.

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Source: National Association of REALTORS®; REALTOR® Magazine 072318